In a statement filed to the High Court, Keith Cochrane, Carillion’s interim CEO, said the company had been in talks with the government and lenders in the months leading up to its collapse in a bid to find a solution to its financial difficulties.

The discussions included Carillion asking the government for short term funding, as well as requesting agreement to defer tax payments. The company also sought support from its lenders, including RBS, but Cochrane claimed the banks wanted to impose tight conditions on any funds which further damaged the company’s liquidity.

The statement says that both EY and PwC rejected requests to become administrators because there was no money left to keep Carillion operational.

Business secretary Greg Clark has asked Insolvency Service to fast-track its investigation into Carillion’s directors and broaden the scope to include those directors previously employed.

Clark said: ‘In particular, I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors. Any evidence of misconduct will be taken very seriously.’

Clark has also written to the chair of the Financial Reporting Council (FRC), Sir Win Bischoff, and asked it to conduct an investigation into the preparation of Carillion’s accounts past and present, as well as the company’s auditors.

The regulator attracted strong criticism from the Treasury committee and others over the length of time it took to launch an investigation into audit issues at HBOS.

Bischoff has replied to Clark’s letter, stating: ‘We have been actively monitoring this situation for some time in close consultation with other regulatory bodies. We have powers to investigate the circumstances relating to the audit of Carillion as well as the action of the relevant accounting professionals.’

Bischoff pledges to provide a further statement shortly regarding the FRC’s proposed actions.

Speaking in the House of Commons yesterday Nicky Morgan, chair of the Treasury committee, raised the question of the tax position for the many small and medium-sized enterprises in the Carillion supply chain, as both contractors and direct suppliers, who face losing contracts and payment because of Carillion’s demise.

Morgan asked: ‘What discussions will the government have with HMRC and other businesses to make sure that these companies are able to continue to pay the tax liabilities and their employees?’

In response the Chancellor Philip Hammond said: ‘HMRC already has a scheme that can assist companies that are finding cash-flow difficulties in meeting tax liabilities. We agreed last night that HMRC will specifically signpost, via the Carillion-specific websites that are operating, that that facility exists.’

Report by Pat Sweet